Correlation Between Shikun Binui and IES Holdings
Can any of the company-specific risk be diversified away by investing in both Shikun Binui and IES Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shikun Binui and IES Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shikun Binui and IES Holdings, you can compare the effects of market volatilities on Shikun Binui and IES Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shikun Binui with a short position of IES Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shikun Binui and IES Holdings.
Diversification Opportunities for Shikun Binui and IES Holdings
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shikun and IES is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shikun Binui and IES Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IES Holdings and Shikun Binui is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shikun Binui are associated (or correlated) with IES Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IES Holdings has no effect on the direction of Shikun Binui i.e., Shikun Binui and IES Holdings go up and down completely randomly.
Pair Corralation between Shikun Binui and IES Holdings
Assuming the 90 days trading horizon Shikun Binui is expected to generate 1.5 times more return on investment than IES Holdings. However, Shikun Binui is 1.5 times more volatile than IES Holdings. It trades about 0.63 of its potential returns per unit of risk. IES Holdings is currently generating about 0.65 per unit of risk. If you would invest 91,300 in Shikun Binui on August 29, 2024 and sell it today you would earn a total of 28,200 from holding Shikun Binui or generate 30.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shikun Binui vs. IES Holdings
Performance |
| Timeline |
| Shikun Binui |
| IES Holdings |
Shikun Binui and IES Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shikun Binui and IES Holdings
The main advantage of trading using opposite Shikun Binui and IES Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shikun Binui position performs unexpectedly, IES Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IES Holdings will offset losses from the drop in IES Holdings' long position.| Shikun Binui vs. Arad | Shikun Binui vs. Alony Hetz Properties | Shikun Binui vs. Danel | Shikun Binui vs. Airport City |
| IES Holdings vs. Israel Canada | IES Holdings vs. Delek Group | IES Holdings vs. Shikun Binui | IES Holdings vs. Israel Discount Bank |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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